Receiving A Full Medicare Reimbursement Waiver

Question: Last week, in one of the Medicare "administrative waiver" cases I am processing, I received from CMS a complete waiver of any Medicare reimbursement claim, based solely on the language of the Medicare statute and the state court post-settlement allocation order that I have been harping on lo these many years. My waiver request was not based on the economic hardship provisions of the federal regs, nor did I provide any of the client's financial information demanded on the Medicare waiver request form (SSA-632-BK).While it is gratifying that CMS has now evidently conceded on the merits of my argument, it raises some significant procedural questions for the pending federal court action that I had hoped would clear up the issue once and for all. Specifically, this is the first case I know of where Medicare has waived its claim based exclusively on the legal proposition that the federal MSP statute does not allow for reimbursement because medical expense recovery was precluded by the state collateral source statute.Have you, or has anyone you know, ever received a full Medicare reimbursement waiver based solely on submission of an allocation order in a PI (not wrongful death) case? Please contact me if you know of any such cases. Your answer will have important implications for the pending declaratory judgment action against Medicare.

New Jersey Attorney

Answer: It is hard to comment too much without seeing the allocation which triggered the waiver. If the state court allocated no proceeds to medicals... then I am not surprised Medicare waived... that's what they often do.

Don’t get me wrong - I think it is great news… However, I don’t think it is yet a clear policy change…

The following always has been the rule: Medicare is bound by an allocation that has been designated by a court on the merits of the case. “The only situation in which Medicare recognizes allocations of liability payments to non-medical losses is when payment is based on a court order on the merits of the case. If the court or other adjudicator of the merits specifically designates amounts that are for payment of pain and suffering or other amounts not related to medical services, Medicare will accept the Court's designation.” Medicare Intermediary Manual, § 3418.7.

Then, when considering whether or not to grant a waiver, the following documentation is requested:

1. Proof of payment for accident-related out-of-pocket medical expenses
2. Procurement costs
3. Expenses and income information that demonstrates financial hardship (if the beneficiary is alleging financial hardship)
4. Physician statements, if permanent disability is stated
5. Any other pertinent information required to make our determination

If you submit a valid court order on the merits of the case with the Waiver application, the reviewer could consider it under #5 above.

Those are my initial thoughts….